Melting Tensions

Arctic emerges as collaboration hot spot

By Saki Hayashi

The Japanese government is accelerating efforts to collaborate with Russia on developing the Arctic region, with hopes that joint projects in shipping and natural gas exploration will push forward talks for a bilateral peace treaty.

In the latest development, Japanese and Russian officials met on December 18 accompanied by members from the private sector to discuss economic cooperation. The two sides signed off on having Japanese trading company Sojitz Corporation and airport operator Japan Airport Terminal Co., Ltd., participate in the construction and operation of a passenger terminal at Khabarovsk International Airport in the Russian Far East.

This follows an October visit by Japanese Foreign Minister Taro Kono to Reykjavik, Iceland. He is the first Japanese cabinet minister to take part in the Arctic Circle Assembly, a gathering bringing together an international assortment of government officials, business leaders, and academics.

TIME SAVER“Geographically, Hokkaido, our northernmost island, is a gateway from Asia to the Northern Sea Route,” Kono said in a speech, referring to the Arctic sea lane which has recently opened up during warmer months due to the melting ice. Passing through the Arctic would shorten shipping times and cut fuel costs for shippers, compared with the traditional use of routes through the Suez or Panama Canals.

“We see potential opportunities for this route, and I will encourage more Japanese companies to pay attention to Arctic businesses,” Kono said. Discussing Japan’s determination to help in building an “Ideal Arctic,” Kono said Japan will contribute to scientific research on climate change and sustainable eco­nomic use of the Arctic, as well as to establishing free and open northern seas.

The possibilities inherent in developing the Arctic have captured imaginations across the globe. Five countries with coasts along the Arctic Sea, including Russia, the United States, and Canada, have been actively developing the region in the name of national interest.

China calls itself a “near-Arctic state,” citing the fact that conditions in the Arctic have an impact on the country’s climate, agriculture, fishing, and forestry. In January, it issued its first-ever white paper regarding plans for the Arctic, and unveiled plans to construct a Polar Silk Road. The plan is part of its larger Belt and Road Initiative, which involves infrastructure development in Asia, Europe, and Africa.

NORTHERN EXPOSURESouth Korea is urging marine shippers and other companies to head north. “Japan, China, and South Korea are all permanent observers to the Arctic Council,” said Damien Degeorges, a Reykjavík-based international consultant specializing in Arctic affairs. The council is a high-level intergovernmental forum that addresses issues faced by governments in the Arctic region.

“They are trying to get more involved in the Arctic, notably through high-level bilateral contacts with Arctic states. Russia is a central actor in the Arctic and major economic developments are ongoing in the Russian Arctic, so it makes sense for Japan to have a cooperation with Russia,” Degeorges said.

When Russian President Vladimir Putin met with Japanese Prime Minister Shinzo Abe during a September summit in Vladivostok, Putin touched on development cooperation in the Yamal Peninsula in northern Russia. The Russian leader said he seeks to advance bilateral ties based on economic cooperation between the two nations. The two sides inked some 10 coope­ration agreements, including liquefied natural gas (LNG) development in the Arctic.

SECURITY MATTERSFor Russia, the Arctic represents a key region for economic vitality and national security. The northeastern shipping route in the Arctic Sea over­laps Russia’s maritime exclusive economic zone. The area around Yamal is said to hold more than 20 percent of global natural gas reserves.

Novatek, Russia’s largest independent gas producer, is soli­citing cross-border investments for its LNG platform project. This dovetails with the Russian government’s appeals for foreign investment. For Japan, the opportunity to develop gas fields would help stabi­lize and diversify energy procurement.

Last November, Japan’s government-backed New Energy and Industrial Technology Development Organization, together with the Sakha Republic in far northeast Russia and other parties, began pilot operation of wind turbine generators that use Japan’s cold-resistance technology. The demonstration project is part of the eight economic cooperation projects Abe proposed to Putin.

Many observers think that economic collaboration in the Arctic will serve to accelerate negotiations toward a final peace treaty between Japan and Russia, bringing closure to an issue dating back to World War II. Abe aims to reach a broad agreement concerning a group of contested islands, in addition to a peace treaty, when he meets Putin on the sidelines of the G20 Summit in Osaka in June.

The polar region also represents a strategic location in terms of regional security. Russia is ratcheting up deploy­ment of military hardware in the Arctic. China is developing ports around the world, which some believe could be con­verted to military use in the future. The Russo–Japanese cooperation hints at a desire to push back against Chinese expansion.